Senate Healthcare Bill Should Repeal Obamacare’s Health Insurance Tax

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Posted by Alexander Hendrie on Thursday, July 27th, 2017, 8:51 AM PERMALINK

As the U.S. Senate continues to move through the process of passing healthcare reform, recent media reports have suggested lawmakers will move forward with a “skinny repeal” bill that contains a limited number of reforms.

Should the Senate go down this path, it is crucial that they include repeal of Obamacare’s health insurance tax.

Repeal of the Obamacare health insurance tax is critical because it is set to go into effect in 2018. If this is allowed to happen, middle class families and small businesses will be hurt with another tax increase. Ideally, the tax should be fully repealed, but if lawmakers are unable to agree on this, they should at least delay the date at which the health insurance tax is set to go into effect.

If the Senate fails to delay this tax, it will total $14.3 billion next year. Over the next decade, the health insurance tax totals $145 billion.

Repeal means strong tax relief for middle and low-income families. According to the American Action Forum, the tax increases premiums by as much as $5,000 over a decade. In total, the tax hits 11 million households that purchase through the individual insurance market, and 23 million households covered through their jobs. Roughly half of the tax is paid by those earning less than $50,000 a year.

In addition, the tax is devastating to small businesses. It is estimated to directly impact as many as 1.7 million small businesses. The National Federation of Independent Business estimates the tax could cost up to 286,000 in new jobs and cost small businesses $33 billion in lost sales by 2023.

Small businesses account for half of all jobs in the US and two-thirds of new jobs in recent decades, so this tax will mean businesses across the country can spend less on investing in new equipment, hiring new workers, or providing higher wages.

The last thing taxpayers need is for the health insurance tax to go into effect, even for one year. Lawmakers must make sure this does not happen and repeal, or at the very least delay the Obamacare health insurance tax.

Photo Credit: George Makris


ATR Supports H.J. Res. 111 to Repeal CFPB's Arbitration Rule

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Posted by Adam Johnson on Monday, July 24th, 2017, 3:52 PM PERMALINK

Americans for Tax Reform (ATR) President Grover Norquist this week sent a letter to Congressional lawmakers urging support for H.J. Res. 111 introduced by Representative Keith Rothfus (R-Penn.).

H.J. Res. 111 would use the Congressional Review Act to block the Consumer Financial Protection Bureau’s (CFPB) rule relating to arbitration clauses, published by the Bureau this month.

Text of the letter is below and can be found here.

July 24, 2017

The Honorable Paul Ryan
Speaker
U.S. House of Representatives
Washington, DC 20515

The Honorable Kevin McCarthy
Majority Leader
U.S. House of Representatives
Washington, DC 20515

Dear Speaker Ryan and Majority Leader McCarthy:

On behalf of Americans for Tax Reform (ATR) I write to express ATR’s strong support for using the Congressional Review Act (CRA) to reverse the Consumer Financial Protection Bureau’s (CFPB) recently published rule relating to arbitration agreements.

The CFPB’s arbitration rule would do little in the way of benefiting American consumers, and instead would result in a flood of class-action lawsuits putting more money in the pockets of trial lawyers. The arbitration rule would cost consumers billions and lead to a projected 6,000 class action lawsuits every five years.

According to the CFPB’s own study, average payouts to consumers after litigation was less than $2.00 per person, which is significantly lower that the amount awarded during the arbitration process. The same study found that only 20 percent of class-action lawsuits are approved and among those the average wait time for a settlement was roughly three years. This is compared to the arbitration process where the wait time is an average of only 6.9 months.

I urge you and your colleagues in Congress to support H.J. Res. 111 introduced by Representative Keith Rothfus (R-Penn.), which would use the authority granted under the Congressional Review Act to reverse the CFPB’s arbitration rule.

Sincerely,

Grover G. Norquist
President
Americans for Tax Reform 

 

Photo credit: John Griffiths 

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ATR Joins Coalition Calling on Congress to Repeal CFPB Arbitration Rule

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Posted by Justin Sykes on Monday, July 24th, 2017, 3:38 PM PERMALINK

Americans for Tax Reform (ATR) this week joined a coaltion of 26 free-market, limited-government, and liberty-oriented groups calling on Congressional lawmakers to use the powers granted under the Congressional Review Act (CRA) to repeal the Consumer Financial Protection Bureau's (CFPB) recently published rule relating to arbitration agreements.  

The CFPB’s arbitration rule would do little in the way of benefiting American consumers, and instead would result in a flood of class-action lawsuits putting more money in the pockets of trial lawyers. The arbitration rule would cost consumers billions and lead to a projected 6,000 class action lawsuits every five years. 

According to the CFPB’s own study, average payouts to consumers after litigation was less than $2.00 per person, which is significantly lower that the amount awarded during the arbitration process. The same study found that only 20 percent of class-action lawsuits are approved and among those the average wait time for a settlement was roughly three years. This is compared to the arbitration process where the wait time is an average of only 6.9 months. 

Text of the letter is below and can be found here.

Dear Speaker Ryan and Senate Majority Leader McConnell: 

We, the following free-market, limited-government, and liberty-oriented organizations, ask you to use the Congressional Review Act (CRA) to reverse recently published rules promulgated by the Consumer Financial Protection Bureau (CFPB) ending long-held policy allowing for binding arbitration contracts. Failure to reverse this regulation will result in an avalanche of class-action lawsuits that will hurt jobs and do little to benefit consumers.

The CFPB’s arbitration rule has been described as “Christmas in July” for America’s trial lawyers – and rightly so. According to the CFPB’s own finding, the rule will cost consumers billions of dollars and unleash over 6,000 class action lawsuits every five years. This rule is an obstacle to the efforts to right America’s fiscal ship and create jobs and prosperity for the American people. 

Class action lawsuits primarily benefit the trial lawyers rather than the plaintiffs they claim to represent. One extreme example regarding the Bank of Boston even resulted in some of the “winning” plaintiffs owing more in legal fees to lawyers,  who walked away with millions, than the meager winnings they received. Class-action lawsuits all too often benefit no one but lawyers, and arbitration provides a fair alternative that should not be prohibited by regulatory fiat.

The CFPB's own report provides undermines the case for relying exclusively on class-action lawsuits. Of the minority of cases filed between 2010 and 2013 that were later settled, consumers received on average only $32, while lawyers received $424 million in total fees. This disparity is due in part to the fact that claims are never filed by the vast majority of those in an eligible class, and lawyers receive fees based on inflated award figures that are never paid out.

There are also significant issues with the structure of the CFPB and its overall lack of accountability to elected officials. A United States Court of Appeals has held that “when measured in terms of unilateral power, the Director of the CFPB is the single most powerful official in the entire U.S. Government, other than the President. Indeed, within his jurisdiction, the Director of the CFPB can be considered even more powerful than the President.” 

As a rehearing of this ruling on the CFPB's constitutionality by the full Circuit is currently underway, and Congress weighs its own various options to rein in the unaccountable agency, CFPB should at the very least be prevented from instituting major new rules that could disrupt large segments of the economy until such issues are resolved. This is a prime opportunity for members of Congress to uphold their oaths to support and defend the Constitution by safeguarding the nation from costly new CFPB regulations.

The Congressional Review Act provides 60 legislative days for Congress to reverse the CFPB's decision. Each day, the clock ticks and the window of opportunity closes. We urge you to work together and reverse this job-killing regulation promulgated by an agency that is unconstitutionally structured.

 

Photo credit: Phil Roeder 

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How Many People Pay Obamacare Tax In Your State?

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Posted by Elizabeth McKee on Monday, July 24th, 2017, 2:47 PM PERMALINK

For a printable version of this list, click here.

Alabama

  • 102,080 Alabama households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 62,867 Alabamans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 54,026 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 28,300 Alabama households paid the Obamacare 3.8% Net Investment Income Tax.
  • 22,180 Alabama households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Alaska

  • 23,390 Alaska households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 28,818 Alaskans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 5,623 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 7,680 Alaska households paid the Obamacare 3.8% Net Investment Income Tax.
  • 6,430 Alaska households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Arizona

  • 183,690 Arizona households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 296,519 Arizonans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 51,977 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 49,750 Arizona households paid the Obamacare 3.8% Net Investment Income Tax.
  • 41,830 Arizona households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Arkansas

  • 78,780 Arkansas households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 74,462 Arkansans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 37,317 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 17,090 Arkansas households paid the Obamacare 3.8% Net Investment Income Tax.
  • 13,160 Arkansas households paid the Obamacare 0.9% Medicare Payroll Tax.

 

California

  • 1,000,600 Calif. households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 709,106 Californians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 263,510 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 575,940 California households paid the Obamacare 3.8% Net Investment Income Tax.
  • 527,270 California households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Colorado

  • 145,120 Colorado households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 307,466 HSA Coloradans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 37,974 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 70,500 Colorado households paid the Obamacare 3.8% Net Investment Income Tax.
  • 55,940 Colorado households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Connecticut

  • 57,000 Conn. households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 318,065 Connecticuters have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 27,599 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families
  • 71,800 Connecticut households paid the Obamacare 3.8% Net Investment Income Tax.
  • 70,750 Connecticut households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Delaware

  • 17,380 Delaware households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 25,311 Delawareans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 8,106 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 8,610 Delaware households paid the Obamacare 3.8% Net Investment Income Tax.
  • 7,230 Delaware households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Florida

  • 631,410 Florida households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 711,485 Floridians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 145,992 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 199,460 Florida households paid the Obamacare 3.8% Net Investment Income Tax.
  • 136,890 Florida households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Georgia

  • 261,510 Georgia households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 379,389 Georgians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 95,367 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 85,310 Georgia households paid the Obamacare 3.8% Net Investment Income Tax.
  • 79,330 Georgia households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Hawaii

  • 13,870 Hawaii households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 354 Hawaiians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 10,690 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 11,110 Hawaii households paid the Obamacare 3.8% Net Investment Income Tax.
  • 7,910 Hawaii households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Idaho

  • 51,570 Idaho households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 58,702 Idahoans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 17,320 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 9,840 Hawaii households paid the Obamacare 3.8% Net Investment Income Tax.
  • 6,510 Hawaii households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Illinois

  • 273,640 Illinois households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 1,351,691 Illinoisans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 99,432 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 160,990 Illinois households paid the Obamacare 3.8% Net Investment Income Tax.
  • 148,130 Illinois households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Indiana

  • 176,850 Indiana households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 281,018 Indianans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 65,953 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 43,580 Indiana households paid the Obamacare 3.8% Net Investment Income Tax.
  • 34,710 Indiana households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Iowa

  • 60,170 Iowa households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 193,955 Iowans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 25,295 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 25,110 Iowa households paid the Obamacare 3.8% Net Investment Income Tax.
  • 17,210 Iowa households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Kansas

  • 65,780 Kansas households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 71,267 Kansans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 25,823 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 26,990 Kansas households paid the Obamacare 3.8% Net Investment Income Tax.
  • 20,480 Kansas households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Kentucky

  • 93,650 Kentucky households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 153,519 Kentuckians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 50,928 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 25,160 Kentucky households paid the Obamacare 3.8% Net Investment Income Tax.
  • 20,100 Kentucky households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Louisiana

  • 135,510 Louisiana households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 190,118 Louisianans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 57,502 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 37,010 Louisiana households paid the Obamacare 3.8% Net Investment Income Tax.
  • 28,210 Louisiana households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Maine

  • 39,120 Maine households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 106,180 Mainers have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 15,430 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 9,480 Maine households paid the Obamacare 3.8% Net Investment Income Tax.
  • 6,800 Maine households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Maryland

  • 104,340 Maryland households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 390,838 Marylanders have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 48,410 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 85,450 Maryland households paid the Obamacare 3.8% Net Investment Income Tax.
  • 80,450 Maryland households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Massachusetts

  • 70,560 Mass. households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 261,183 Massachusettsans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 57,028 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 131,150 Massachusetts households paid the Obamacare 3.8% Net Investment Income Tax.
  • 124,070 Massachusetts households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Michigan

  • 209,320 Michigan households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 148,411 Michiganders have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 108,726 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 78,260 Michigan households paid the Obamacare 3.8% Net Investment Income Tax.
  • 69,260 Michigan households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Minnesota

  • 94,440 Minnesota households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 908,711 Minnesotans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 45,298 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 65,650 Minnesota households paid the Obamacare 3.8% Net Investment Income Tax.
  • 57,560 Minnesota households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Mississippi

  • 77,980 Mississippi households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 34,891 Mississippians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 35,802 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 13,780 Mississippi households paid the Obamacare 3.8% Net Investment Income Tax.
  • 10,980 Mississippi households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Missouri

  • 143,220 Missouri households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 211,477 Missourians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 59,973 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 44,780 Missouri households paid the Obamacare 3.8% Net Investment Income Tax.
  • 37,230 Missouri households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Montana

  • 34,250 Montana households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 91,675 Montanans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 8,415 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 8,290 Montana households paid the Obamacare 3.8% Net Investment Income Tax.
  • 4,430 Montana households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Nebraska

  • 47,150 Nebraska households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 173,582 Nebraskans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 15,690 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 16,730 Nebraska households paid the Obamacare 3.8% Net Investment Income Tax.
  • 11,220 Nebraska households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Nevada

  • 87,780 Nevada households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 65,230 Nevadans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 18,886 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 20,890 Nevada households paid the Obamacare 3.8% Net Investment Income Tax.
  • 15,390 Nevada households paid the Obamacare 0.9% Medicare Payroll Tax.

 

New Hampshire

  • 37,240 NH households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 94,317 New Hampshirites have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 13,708 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 16,610 New Hampshire households paid the Obamacare 3.8% Net Investment Income Tax.
  • 15,700 New Hampshire households paid the Obamacare 0.9% Medicare Payroll Tax.

 

New Jersey

  • 221,150 NJ households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 541,837 New Jersians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 67,792 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 166,690 New Jersey households paid the Obamacare 3.8% Net Investment Income Tax.
  • 176,560 New Jersey households paid the Obamacare 0.9% Medicare Payroll Tax.

 

New Mexico

  • 50,750 NM households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 32,648 New Mexicans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 15,633 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 12,410 New Mexico households paid the Obamacare 3.8% Net Investment Income Tax.
  • 8,310 New Mexico households paid the Obamacare 0.9% Medicare Payroll Tax.

 

New York

  • 427,100 New York households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 703,454 New Yorkers have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 140,724 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 306,330 New York households paid the Obamacare 3.8% Net Investment Income Tax.
  • 287,060 New York households paid the Obamacare 0.9% Medicare Payroll Tax.

 

North Carolina

  • 251,530 NC households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 183,628 North Carolinans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 93,615 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 81,020 North Carolina households paid the Obamacare 3.8% Net Investment Income Tax.
  • 70,600 North Carolina households paid the Obamacare 0.9% Medicare Payroll Tax.

 

North Dakota

  • 20,460 ND households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 20,174 North Dakotans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 4,363 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 10,580 North Dakota households paid the Obamacare 3.8% Net Investment Income Tax.
  • 5,640 North Dakota households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Ohio

  • 235,570 Ohio households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 801,198 Ohioans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 127,596 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 96,790 Ohio households paid the Obamacare 3.8% Net Investment Income Tax.
  • 83,670 Ohio households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Oklahoma

  • 95,910 Oklahoma households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 120,333 Oklahomans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 38,595 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 31,300 Oklahoma households paid the Obamacare 3.8% Net Investment Income Tax.
  • 21,050 Oklahoma households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Oregon

  • 92,310 Oregon households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 120,031 Oregonians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 36,505 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 35,860 Oregon households paid the Obamacare 3.8% Net Investment Income Tax.
  • 27,690 Oregon households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Pennsylvania

  • 244,290 Penn. households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 407,456 Pennsylvanians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 130,911 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 136,100 Pennsylvania households paid the Obamacare 3.8% Net Investment Income Tax.
  • 120,820 Pennsylvania households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Rhode Island

  • 23,540 Rhode Island households paid the Obamacare individual mandate tax
  • 13,213 Rhode Islanders have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 11,710 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 10,380 Rhode Island households paid the Obamacare 3.8% Net Investment Income Tax.
  • 9,140 Rhode Island households paid the Obamacare 0.9% Medicare Payroll Tax.

 

South Carolina

  • 122,750 SC households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 76,381 South Carolinians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 37,279 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 30,550 South Carolina households paid the Obamacare 3.8% Net Investment Income Tax.
  • 23,760 South Carolina households paid the Obamacare 0.9% Medicare Payroll Tax.

 

South Dakota

  • 18,970 SD households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 34,051 South Dakotans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 6,086 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 8,460 South Dakota households paid the Obamacare 3.8% Net Investment Income Tax.
  • 4,570 South Dakota households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Tennessee

  • 159,080 Tenn. households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 527,030 Tennesseans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 66,043 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 47,570 Tennessee households paid the Obamacare 3.8% Net Investment Income Tax.
  • 46,000 Tennessee households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Texas

  • 1,066,360 Texas households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 1,707,591 Texans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 272,632 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 303,120 Texas households paid the Obamacare 3.8% Net Investment Income Tax.
  • 269,190 Texas households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Utah

  • 78,530 Utah households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 163,958 Utahans have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 22,238 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 21,240 Utah households paid the Obamacare 3.8% Net Investment Income Tax.
  • 15,630 Utah households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Vermont

  • 15,490 Vermont households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 52,930 Vermonters have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 7,021 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 5,860 Vermont households paid the Obamacare 3.8% Net Investment Income Tax.
  • 3,760 Vermont households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Virginia

  • 184,290 Virginia households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 428,677 Virginians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 58,578 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 113,500 Virginia households paid the Obamacare 3.8% Net Investment Income Tax.
  • 104,060 Virginia households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Washington

  • 154,460 households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 410,064 Washingtonians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 55,899 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 93,330 Washington households paid the Obamacare 3.8% Net Investment Income Tax.
  • 79,000 Washington households paid the Obamacare 0.9% Medicare Payroll Tax.

 

West Virginia

  • 45,250 WV households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 19,948 West Virginians have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 20,823 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 8,630 West Virginia households paid the Obamacare 3.8% Net Investment Income Tax.
  • 6,750 West Virginia households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Wisconsin

  • 115,500 Wisconsin households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 227,138 Wisconsinites have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 50,609 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 47,510 Wisconsin households paid the Obamacare 3.8% Net Investment Income Tax.
  • 38,160 Wisconsin households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Wyoming

  • 19,600 Wyoming households paid the Obamacare individual mandate tax. (Tax year 2014, the most recent available)
  • 15,034 Wyomingites have a Health Savings Account. All are subject to Obamacare’s HSA taxes.
  • 4,570 school-aged children have disabilities. Flexible Spending Accounts are hit with Obamacare taxes that are especially harmful to special needs families.
  • 6,300 Wyoming households paid the Obamacare 3.8% Net Investment Income Tax.
  • 3,090 Wyoming households paid the Obamacare 0.9% Medicare Payroll Tax.

 

Sources

Individual Mandate tax data: official IRS data for tax year 2014, the most recent year available.

HSA data: https://www.ahip.org/wp-content/uploads/2017/02/2016_HSASurvey_Draft_2.14.17.pdf

Special needs data: https://www.census.gov/prod/2011pubs/acsbr10-12.pdf

Photo Credit: Petteri Sulonen

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KEY VOTE: ATR Urges “YES” Vote on Motion to Proceed to Obamacare Repeal

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Posted by Alexander Hendrie on Monday, July 24th, 2017, 10:00 AM PERMALINK

Americans for Tax Reform WILL RATE a vote on the motion to proceed to H.R. 1628 a pro-taxpayer vote

ATR urges a YES vote

Later this week, Senators will have the opportunity to fulfill their promise to the American people and repeal Obamacare by voting yes on the motion to proceed to the House passed American Health Care Act (H.R. 1628). ATR urges a "yes" vote on the motion to proceed to AHCA.

When it was signed into law, Obamacare imposed one trillion dollars in higher taxes on the American people. These taxes directly harm middle class families and small businesses across the country.

“Abolishing Obamacare ends a collection of roughly 20 taxes and that reduces total taxes on all Americans by one trillion dollars over a decade,” said Grover Norquist, president of Americans for Tax Reform. “Every step towards ending all, most or some of those taxes is helpful to taxpayers and other living things. A no vote on proceeding closes the door on tax reduction as well as reforming health care by expanding Health Savings Accounts and Flexible Savings Accounts.”

By voting “yes” on the motion to proceed, Senators have an opportunity to repeal the following taxes:

-Obamacare’s Individual Mandate Tax which hits 8 million Americans each year.

-Obamacare’s Employer Mandate Tax.

-Obamacare’s Medicine Cabinet Tax which hits 20 million Americans with Health Savings Accounts and 30 million Americans with Flexible Spending Accounts.

-Obamacare’s Flexible Spending Account tax on 30 million Americans.

-Obamacare’s Chronic Care Tax on 10 million Americans with high out of pocket medical expenses.

-Obamacare’s HSA withdrawal tax.

-Obamacare’s 10% excise tax on small businesses with indoor tanning services.

-Obamacare’s health insurance tax.

-Obamacare’s 3.8 percent net investment income tax on capital gains.

-Obamacare’s 0.9 percent Medicare Payroll tax.

-Obamacare’s medical device tax.

-Obamacare’s tax on prescription medicine.

-Obamacare’s tax on retiree prescription drug coverage.

-Obamacare’s “Cadillac tax” on employer provided health insurance.

 

Photo Credit: Ben Malns


Happy Birthday Dodd-Frank…Hope It’s Your Last!

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Posted by Justin Sykes on Friday, July 21st, 2017, 11:17 AM PERMALINK

Today marks exactly seven years since President Obama signed into law the costly and burdensome Dodd-Frank Wall Street Reform and Consumer Protection Act. While the goal of Dodd-Frank Act was to protect financial consumers and “reign in Wall Street” following the 2008 financial crisis, the last seven years have proven that goal has not come to fruition and instead financial consumers, small banks and credit unions have been crushed by this disastrous law.

For America’s financial consumers, the Dodd-Frank Act has failed on all accounts. Misguided provisions such as anti-free market price caps instituted under the Durbin Amendment have all but eviscerated free checking accounts, driven up average minimum deposits and increased monthly checking account maintenance fees.

For instance in 2009, 75 percent of banks offered free checking accounts. Following the passage of Dodd-Frank and the Durbin Amendment in 2010, that number dropped to 45 percent the following year, and has now fallen to under 40 percent today.

According to an April 2017 study by the International Center for Law and Economics, in 1999 the average minimum deposit required in order to avoid fees on non-interest-bearing accounts was $562.27. The minimum fell to $109.28 in 2008. Yet after the Durbin Amendment passed, the minimum skyrocketed to $732.02 in 2012 and stands at $670.74 as of 2016.

Reduced free checking and increased minimum deposits and fees resulting from Dodd-Frank’s Durbin Amendment have proven incredibly regressive for low-income financial consumers and have led to millions of Americans becoming “unbanked.” 

As more Americans are pushed further out the traditional banking system by Dodd-Frank provisions, they have turned to alternative financial products such as prepaid debit cards, which serve a similar function as traditional bank accounts but are seen as more affordable given increased costs on traditional checking accounts due to Dodd-Frank. 

Amounts placed on prepaid cards have grown from $1 billion in 2003 to a projected $112 billion by 2018. According to a 2014 report from The Pew Charitable Trusts, of the estimated 23 million consumers using prepaid cards a quarter were low-income, with a third having annual income below $15,000.  However the Consumer Financial Protection Bureau (CFPB), another creation of Dodd-Frank, is now ironically working to end prepaid debit cards through a rule set to go into effect in 2018. 

Thus not only has Dodd-Frank driven many consumers, especially low-income Americans, out of the traditional banking system, but has allowed the CFPB to outlaw one of the last remaining and affordable financial products they have left. As Representative Ted Budd (R-NC) has stated, “Dodd-Frank has sawed off the bottom rung of the ladder of economic mobility.”

While the detrimental impact Dodd-Frank has had on American financial consumers is atrocious, it is also the case that Dodd-Frank has drowned U.S. credit unions and community banks in a sea of regulatory costs and an ever-growing compliance burden. According to a 2016 study by the American Action Forum, Dodd-Frank has imposed more than $36 billion in final rule costs and 73 million hours of paperwork.

Unlike their larger competitors, small credit unions and community banks don’t have armies of compliance lawyers or funds available to afford the regulatory burden imposed by Dodd-Frank. It is now the case that one in every four credit union employees time is spent on regulatory compliance, adding up to an additional $6.1 billion in costs for credit unions in 2014 alone. As a result of Dodd-Frank, an average of one small financial institution shutters or is consolidated everyday. 

Thankfully this year House Financial Services Committee Chairman Jeb Hensarling (R-Texas) has been leading the effort to enact massive reforms to the Dodd-Frank Act in order to protect American financial consumers and small financial institutions. Chairman Hensarling’s Financial CHOICE Act (H.R. 10), which passed the House in June 233-186, targets many of the most onerous and costly provisions of Dodd-Frank for reform and repeal. While the CHOICE Act faces an uphill battle in the Senate, it highlights the need for lawmakers to remain focused on reigning in Dodd-Frank.

Thus as the Dodd-Frank Act turns seven years old today lawmakers in Congress should take time to reflect on the disaster Dodd-Frank has become for their constituents and the markets as a whole. 

Happy Birthday Dodd-Frank! Hope it’s your last!

 

Photo Credit: Steve Jurvetson

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Congress Should Pass the Preserving Taxpayers Rights Act

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Posted by Alex Hendrie on Thursday, July 20th, 2017, 8:00 AM PERMALINK

In recent years, the IRS has proven again and again that it is incapable of doing its job. This failure is due to both the increasing politicization of the agency, as well as the ineptitude of IRS management.

Recently, government watchdog groups have found the IRS mispaid 31% of their employees, gave bonuses to tax delinquent employees, shortchanged taxpayers by $1.2 million, lost track of computers with sensitive taxpayer information on them, and wasted $12 million on an unstable email system.  

One of the strangest blunders by the IRS was the agency’s insistence on hiring Quinn Emanueal, an elite, litigation-only, white shoe law firm to audit tech company Microsoft. The agency did so despite having the capability to handle this audit without hiring private contractors.

Already, the IRS has roughly 40,000 employees responsible for enforcement and auditing. In addition, the agency has access to the services of the office of Chief Counsel or a Department of Justice attorney, both of which would have had the expertise to conduct this kind of work without putting sensitive information at risk.

Instead, the IRS hired a law firm with zero prior experience handling sensitive tax data, leaving taxpayers to foot a $1,000 per hour bill. This unusual decision promoted an investigation from Senate Finance Chairman Orrin Hatch (R-Utah) over concerns that the hiring of the firm was wasting taxpayer resources, and that there were significant risks of using private contractors for the examination of records and handling of sworn testimony.

Bizarrely, it was determined that the IRS hiring this outside firm did not break any laws, and it still remains legal for the agency to hire unqualified and expensive outside counsel today. This decision should be troubling for all taxpayers as it shows the lack of protections in place.

Last week, Members of Congress introduced legislation that would fix this problem and ensure sensitive taxpayer information is protected. The “Preserving Taxpayers’ Rights Act,” introduced by Congressman Jason Smith (R-MO) puts in a number of guardrails around the IRS so that the agency cannot abuse or abrogate its duty to taxpayers:

-First, this legislation ensures taxpayers have an explicit legal right to have their case heard by the independent and impartial IRS Office of Appeals. This will ensure disputes between taxpayers and the IRS are addressed in a timely, efficient and cost-saving manner.

-Second, the bill limits the IRS’s ability to designate cases for litigation to situations where tax abuse is a recurring, significant legal issue affecting a large number of taxpayers.

-Third, the bill limits the ability of the agency to use designated summonses to situations where a taxpayer is being uncooperative and refusing to comply with a request to provide information.

-Fourth, and most importantly, the legislation eliminates the IRS’s ability to outsource a taxpayers’ audit to a private entity. This will better protect sensitive taxpayer information and ensure taxpayer funds cannot be wasted.

These reforms will ensure that the IRS is not able to abuse the auditing process, and that they must instead follow a system that is transparent, efficient, and protects sensitive taxpayer information.

Reigning in power and eliminating provisions that encourage abuses of power to happen are the critical first steps to reforming the IRS. ATR urges all Members of Congress to support this commonsense, bipartisan legislation and encourages its swift passage. 

Photo Credit: Dustin Gaffke


ATR Statement in Support of House FY 2018 Budget Resolution

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Posted by Alexander Hendrie on Wednesday, July 19th, 2017, 7:00 AM PERMALINK

ATR President Grover Norquist released the following statement following the release of House’s FY 2018 Budget Resolution:

“The House budget is the vehicle for lawmakers to pass generational pro-growth tax reform. Congress should move forward to pass tax reform based on the principles outlined by President Trump. The House budget also lays out an aggressive plan to eliminate spending, rein in the deficit, and reduce taxes now and in the long-term.”

[To View ATR's Letter of Support for the FY 18 Budget Propsosal Click Here]

Highlights of the FY 18 Budget Proposal:

-The proposals balance the budget in ten years.

-The budget achieves $6.5 trillion in deficit reduction over the next decade.

-The budget calls for reducing government-wide improper payments of $700 billion.

-The budget also calls for more than $200 billion in spending reduction through reforms to mandatory spending.

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IRS Destroyed Laptops Containing Critical Records, says Inspector General

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Posted by Elizabeth McKee on Tuesday, July 18th, 2017, 2:25 PM PERMALINK

The IRS failed to adequately store, backup, and search official records for use in Freedom of Information requests and other litigation, according to a new report released by the Treasury Inspector General of Tax Administration. Performing an independent audit, TIGTA found:

 The IRS’s current e-mail system and record retention policies do not ensure that e-mail records are saved and can be searched and retrieved for as long as needed. Additionally, repeated changes in electronic media storage policies, combined with a reliance on employees to maintain records on computer hard drives, has resulted in cases in which Federal records were lost or unintentionally destroyed.

In particular, the IRS destroyed laptops containing critical records – even when those records were requested for use in pending litigation. In one instance, TIGTA notes:

We found that when an employee separated from the IRS in August 2014, the employee left his laptop with his secretary. That employee was under a litigation hold to ensure that relevant evidence was preserved for use in litigation. However, without a policy in place to ensure that laptops of separating employees under litigation holds were maintained, that laptop was sent to the IT organization for standard sanitization and disposal.

After Lois Lerner’s hard drive crashed in 2011, the hard drive was shredded into quarter-size pieces and sold for scrap. In the process, 24,000 Lerner emails – which may have shed light on the IRS conservative targeting scandal – were lost.

Even when the IRS updated its policies and began saving employee hard drives, it failed to record who had used which hard drives. “Without this correlation,” reports TIGTA, “successfully completing a search for specific e-mail or other electronic information residing on a disposed hard drive would be highly unlikely and could result in destroyed records.”

Although the IRS stores 32,000 laptops and hard drives, it does not keep a detailed inventory. “This condition makes it difficult for the IRS to locate the electronic records of separated employees if needed to respond to FOIA requests or other official inquiries,” writes TIGTA.

This lack of an inventory reduces government transparency by making it impossible for taxpayers to exercise their rights guaranteed by the Freedom of Information Act. Nonetheless, the IRS continues to store thousands of laptops full of inaccessible information – even as it purchases new laptops that will eventually end up in the same place. Not only does the IRS violate taxpayer rights, but it does so in a way that wastes taxpayer dollars.

Upon publication of the TIGTA report, Rep. Kevin Brady, Sen. Orrin Hatch, and Rep. Vern Buchanan sent a letter urging IRS Commissioner John Koskinen to remedy the agency’s failed electronic recordkeeping procedures. The legislators write:

The lack of an electronic mail system that is compliant with Federal records management requirements and could allow the IRS to retain and search the records of current and separated employees is unacceptable.  Failure to retain and produce records reduces transparency, inhibits Congressional oversight, and opens the IRS to judicial sanctions during litigation.  TIGTA's findings are also symptomatic of the IRS's shambolic information technology modernization efforts. 

In addition to losing and destroying employee hard drives, the IRS also fails to back up sensitive emails to a shared network drive. “Although interim policy requires that e-mail be archived for IRS executives,” TIGTA notes, “we found four executives from our sample of 20 who were not archiving e-mails as instructed. All four were members of the IRS Senior Executive Team.” TIGTA also cites a 2016 report by User and Network Services identifying “23 executives whose e-mail accounts were not configured to archive their e-mail when they assumed their executive position.”

Although federal law requires government agencies to honor FOIA requests within 20 days, the report says that some FOIA cases at the IRS took as long as 2.5 years to close. Reviewing a sample of 35 FOIA cases, TIGTA found that 30 cases took longer than the required 20-day limit, and the average case took 212 days to close.

Even when the IRS closes an FOIA case, there is no certainty that they attempted to search for all relevant records. Examining a sample of 30 closed FOIA cases, TIGTA found:

The IRS did not follow its own policies that require it to document which employees searched for responsive records and what criteria were used in the search. Without this information, the PGLD [Privacy, Governmental Liaison, and Disclosure] office was unable to document that an adequate search was performed.

In addition, our case review found four instances in which the IRS did not search for all responsive records.

It is particularly unlikely that the IRS will search the computer of a separated employee – even if that computer contains information that pertains to a FOIA request. TIGTA says:

IRS efforts in response to requests for records do not consistently search records of separated employees. For example, in one of the litigation cases we examined, the IRS did not search for records associated with one of 11 employees who had separated. In October 2014, the Department of Justice, on behalf of the IRS, filed a document with the court stating that 11 former IRS employees’ laptop hard drives were “likely unavailable” for electronic discovery of evidence. However, in our search, we found that, according to the IRS inventory system, one hard drive was listed as in-stock at the time the court document was filed and thus could have been searched to determine if records were still available.

Previous testimony from TIGTA revealed that the IRS failed to search five of six possible sources for Lois Lerner’s emails. If anything, the TIGTA report reveals that the loss of the Lerner emails was not a unique incident. The IRS has consistently failed to store, backup, and search employee hard drives and email exchanges, and taxpayers have consequently been prevented from accessing critical federal records.

 

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One Way to Reform the IRS is Through Passing the Refund Rights for Taxpayers Act

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Posted by Virginia Birkofer on Tuesday, July 18th, 2017, 1:41 PM PERMALINK

In recent years, the IRS has proven itself to be one of the most dysfunctional federal agencies. It is not surprising that the agency is extremely unpopular. In the last several years, official watchdogs have found the agency has failed in its responsibility to taxpayers on multiple occasions.

For instance, in the past few years, the Inspector General has found that the IRS has mispaid 31% of their employees, blocked public access to their trials, given bonuses to tax delinquent employees, shortchanged taxpayers by $1.2 million, lost track of computers with sensitive taxpayer information on them, and wasted $12 million on an unstable email system to name a few instances demonstrating incompetency. 

Clearly, there is need for reform that ensures the agency treats taxpayers with respect. One law that can be changed is 26 U.S. Code § 6511, which gives taxpayers just three years to claim a refund from the IRS when they overpay. If they fail to claim the refund in this time period, any money becomes the property of the government. In contrast, 26 U.S. Code § 6502, gives the IRS an entire decade to correct tax mistakes. This is patently unfair given that it is these federal bureaucrats entire job to audit taxes.

To address this discrepancy, Congressman Neal Dunn (R-Fla.) recently introduced “The Refund Rights for Taxpayers Act,” legislation that ensures taxpayers and the IRS have the same amount of time to correct any mistake that results in the payment of either too much or too few in taxes.

The Refund Rights for Taxpayers Act allows taxpayers to claim overpaid taxes from the IRS for seven years. It also reduces the time the IRS has to collect additional taxes from taxpayers to seven years.

This is a simple, yet important solution to ensuring that bureaucrats will be held to the same standards that everyday Americans are held to.

Moreover, reducing the time period the IRS has to collect back taxes will also guarantee that the agency is held to the high standard that the American people expect.

Members of Congress and the current administration can demonstrate their commitment to reforming the IRS and protecting taxpayers by supporting and co-sponsoring the Refund Rights for Taxpayers Act.

[ATR’s letter of support for the Refund Rights for Taxpayers Act can be found here.]

 

Photo Credit: Photo in the Public Domain, link:https://commons.wikimedia.org/wiki/File:IRS_Building_Constitution_Avenue.jpg

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